TIAA-Cref agreed to buy Nuveen Investments for $6.25 billion including debt, in the retirement- and financial-services behemoth's largest acquisition ever, according to top executives from both companies.

The transaction would create a firm with nearly $800 billion under management, moving TIAA-Cref up the ranks of the US's biggest money managers. It also would give Nuveen's owner, private-equity firm Madison Dearborn Partners, a clean exit from a seven-year-old investment.